DECA Retail Merchandising Practice Exam

Customer demand is a critical factor in merchandise planning because it directly influences which products retailers choose to offer and how they manage their inventory. Understanding customer preferences and purchasing behaviors allows retailers to select products that are more likely to sell, ensuring that they align with what consumers are actively seeking. When merchandise selection reflects current demand, it maximizes the potential for sales and enhances customer satisfaction, as shoppers find the items they want available in stores or online.

This connection between customer demand and product selection is vital for optimizing stock levels and reducing excess inventory, which can tie up capital and lead to markdowns. Success in retail heavily relies on the ability to meet customer needs, making the understanding of demand an essential part of merchandise planning strategies.